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Bankruptcy May Be Your Option

Another casual dining restaurant seeks bankruptcy protection

A rating firm claims that restaurants are at the head of the list of businesses that are distressed. Over the past year, several in Oklahoma and other areas of the country have sought ways to manage overwhelming debt, often due to a decline in the popularity of casual dining establishments in general. Recently, another company announced its decision to follow the path set by other restaurants; it filed for Chapter 11 bankruptcy protection.

The company, Romano's Macaroni Grill, opened in 1988. It has locations in 25 states and employs approximately 4,600 people. However, court papers indicate that the company is struggling with debts in the range of` $50 million to $100 million with assets only in the range of $10 to $50 million. Prior to making the announcement, the company closed 37 locations that were underperforming; the company is involved in litigation with landlords regarding several of those closed locations.

Prior to filing for bankruptcy, the company already had a plan. It hopes to exit bankruptcy in early 2018. It has secured a $5 million bankruptcy loan that will convert to an exit loan once the company emerges from bankruptcy. The same company will also provide Romano's $8.5 million when it exits bankruptcy. Romano's unsecured creditors will receive $500,000 to share if they agree to the plan.

Owning and running a business in Oklahoma and across the country is often a difficult undertaking. The flow of business can slow due to trends beyond the control of decision makers in the company. As a result, many seek guidance from an attorney with experience with Chapter 11 bankruptcy filings. Seeking such protection is often the best option to manage overwhelming debt and secure the company's future success.

Source: thestreet.com, "Romano's Macaroni Grill Files for Chapter 11 Bankruptcy Protection", Stephanie Gleason, Oct. 18, 2017

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